Plex Picks SaaS Veteran as CEO

Yesterday, SaaS ERP pioneer Plex Systems announced the appointment of Oracle executive Jason Blessing as its new CEO. The move comes on the heels of the company's $30 million investment from Accel Partners.

The choice of Blessing, Oracle's senior VP of application development, as the leader of Troy, Mich.-based Plex perhaps signals a tighter focus on SaaS-based automation and innovation.

Blessing is no stranger to SaaS or SaaS companies. He held a number of executive roles at SaaS talent management pioneer Taleo, which was acquired by Oracle last year for $1.9 billion.

Plex, which specializes in the volatile manufacturing industry, competes indirectly with Oracle in the ERP market. Oracle is a leader in the back-office ERP systems market. Plex competes more directly with SaaS ERP rival Netsuite and mid-tier ERP market leader Epicor. Epicor markets both back-office and SaaS-based ERP systems.

One advantage for Plex is the fact that roughly 60 percent of its customers are in the resurgent US automotive industry. Still, the overall volatility of the US manufacturing market, and waning questions about the cloud's latency on the factory floor, makes SaaS ERP penetration difficult.

"Manufacturing ERP is, by far, the most complex enterprise software to design and build," Blessing said in a release. "Plex Systems is the first company to build a cloud-based manufacturing ERP solution and has a significant lead over its competitors in this space."

He believes the timing is right for Plex because SaaS and Plex have been around long enough to allay doubts about the effectiveness of SaaS in manufacturing.

"The company has built the most complete cloud offering for manufacturing at precisely the time when manufacturers have become comfortable moving this critical component of their business to the cloud," Blessing said.

Even though US manufacturing has been in a period of decline for much of the past decade, the industry has been on the mend in the last few years, according to a report from the Boston Consulting Group. SaaS-based ERP represents an opportunity for manufacturing firms to cut costs and reduce their focus on the management of very expensive back-office ERP systems.

Accel sees SaaS ERP as a growth market in which 17-year-old Plex is a youthful pioneer. Research firm Aberdeen says SaaS ERP adoption has more than doubled since 2009, while back-office ERP solutions have decreased by more than 25 percent over the same period. But SaaS ERP still has market share in the single digits, which is what attracted equity investor Accel Partners.

"In 2008, we raised a half-billion fund to invest in more mature growth-oriented companies -- companies that are cashflow positive -- that are up and running," Sameer Gandhi, Accel partner and Plex board member, told us in a recent interview. "In 2011, we raised a second growth fund, which was a $900 million-plus fund, which is where the Plex investment comes from." (See: SaaS-ERP Pioneer Plex Gains $30M.)

The weird thing about the US is that sometimes we have industrial policy, and sometimes we don't. The government intervenes as circumstances warrant (GM and Chrysler bailouts, AIG, bank bailouts, Long Term Capital, S&L crisis). Otherwise, companies are pretty much left alone once you get beyond the petty details of tax codes and industry-specific regulations. Business has some input via Congress to influence this sort of stuff.

This is not to be confused with neo-mercantilism, a good example of which is China, Inc. State-owned companies establish new industries behind tariff/trade walls, supported by cheap capital from state-owned banks and fueled with stolen technology from foreign competitors.

in the US, "industrial" policy is the accidental by-product of the interaction of interest groups on the US government. Abroad, it is the government taking very deliberate steps picking winner and loser industries and backing it with state capital.

And @Cas, we wouldn't have a US auto industry today if it wasn't for government money. The value of that cash infusion can be debated, but as GM and Chrysler emerged from government influence we've also seen a re-investment in IT. GM is bringing back IT in-house, building new IT facilities and hiring a few thousand IT professionals. I can't help but wonder if SaaS will be part of their new model.

And let's not forget the supply chain. GM is in the car assembly business. There are thousands of suppliers that are actually in the parts manufacture business. Will the real home for SaaS in manufacturing be in the supply chain?

Something that often gets missed in discussions of US manufacturing is the role of government. The minute you talk about the role of government in business, you get the naysayers. But the truth is governments play a very important role in many industries particularly manufacturing. Unfortunately the examples are all abroad. Just about every government other then the US government is deeply involved in helping their manufacturers through things like funding which can lead to innovation. Government also provides a market for many of these innovations. If I started to list the innovations that came from government funding in areas such as computers, jet engines, lasers and on and on, the list would go on for pages.

I think SaaS/manufacturing will reach its peak potential when you combine that ERP system with automated manufacture using 3-D printers.

This won't be happening for five years. But when it does, expect to see a lot of manufacturing to be discontinued in East Asia and repatriated to here. Older metal benders won't get rehired. Technicians will replace mechanics.

Venture capitalists are always prowling for disruptive technologies. Getting in on the ground floor of a big change is how fortunes are made.

Every firm that takes equity investment has to make a lot of tradeoffs, but one of the big positives of taking VC cash is you get the benefit of the VCs Silicon Valley contacts and the firms in the VC's portfolio. Without the VC's involvement (the cash being the main involvement) the Oracle executive would not take the job of CEO at a small SaaS company based in Troy, Michigan. He would not leave his cushy job at Oracle and head off to Motown.

Naomi Bloom, founder and managing partner of Bloom & Wallace, sat down with us recently at Workday to talk about what she calls four of the foundational capabilities of SaaS -- or at least, real SaaS. In the first segment of this four-part video series on SaaS (or enterprise cloud applications), Naomi discusses why configuration is a better choice than customization.

Business teams want applications to be simple, scalable, and sexy -- applications people are passionate about using. Meanwhile, IT needs applications to be safe, secure, and sustainable. Ray Wang of Constellation Research points the way to the best of both worlds.

Many application vendors now claim they're in the cloud. But being committed to this new delivery model requires more than just saying it. So what must-haves should you look for in a cloud vendor? Watch this video to see the 10 critical requirements for cloud applications.

See how Workday's Enterprise Cloud has helped CareFusion, Flextronics, and TripAdvisor simplify global operations, provide unprecedented visibility into business information, and capitalize on speed and continuous innovation lifestyle of SaaS.

In this video, Laurent Botella, Director of Payroll Strategy at Workday, discusses the benefits of using Workday Payroll Software as a Service (SaaS) and what payroll professionals can expect in the future.

Do you understand the true value of your human capital? In this Workday video, the importance of leveraging the real value of your people is discussed. You’ll learn about the most common workforce challenges and technology obstacles. Learn how you can get better workforce insights into your talent.

Your business is the sum of its parts: your inventory, production, marketing, and spend. But the most important part of your business is your workforce. More than half your costs can be tied to your workers. Watch this video to learn why people are the new bottom line.

In this video, Leighanne Levensaler, VP of Product Strategy at Workday, speaks about the challenges HR professionals face with legacy human resource systems and how they can become the workforce authority with Workday’s unified HR solution.

Time tracking is painful. But it doesn't have to be. You just need a better system. And with Workday Time Tracking, you can have one. Watch the video to learn about this cutting-edge time and attendance application that allows you to process payroll and do workforce analysis in minutes.

How Oracle and other companies in the SaaS market can learn lessons about building stong, enterprise-directed ecosystems of apps and solutions from the example of Amazon and its recent Fire phone release.